IRS Releases ACA-Related Proposed Rule on Employer Shared Responsibility

On Jan. 2, 2013, the Internal Revenue Service (IRS) published a proposed rule pursuant to the Affordable Care Act (ACA) regarding employer shared responsibility for health insurance coverage. The proposed rule is now subject to public comment.

The requirements of the proposed rule would affect “applicable large employers,” defined as employers that employed an average of at least 50 full-time employees on business days during the previous calendar year. Among other things, the proposed rule:

  1. Proposes that an applicable large employer is required to offer coverage to employees and to their dependents, up to age 26. We are currently evaluating this in further detail, but the IRS’ decision is based on its reading of a statute that requires dependents to be included. For purposes of this section, “dependent” does not include any individual other than children.
  2. Addresses the definition of a full-time employee and provides for penalties for failure to provide minimum essential coverage.

According to the IRS, the proposed rule largely follows guidance in earlier IRS notices released in 2011-2012, with some modifications in response to public comments.

This proposed rule will be open for comment until March 18, 2013. The IRS also announced that it plans to hold a public hearing on the proposed rule on April 23, 2013. We are currently reviewing the proposed rule and will send you information on key aspects as it is available.